Event

Navigating Corruption and Criminal Law in Arbitration: Paris Arbitration Week 2025

April 25, 2025

FRA was pleased to contribute to two insightful discussions at this year’s Paris Arbitration Week (PAW), exploring how criminal and corruption risks are shaping the arbitration landscape. In a joint panel with Navacelle, FRA Partner Yousr Khalil shared forensic insights on navigating red flags in arbitration. Meanwhile, FRA Director Amina Khoungui featured on a roundtable hosted by ESSEC Business School examining the growing influence of criminal law on arbitration proceedings. Both sessions highlighted the increasing complexity of corruption-related issues in international disputes and the evolving role of legal and forensic practitioners in addressing them.

Navigating Red Flags in Arbitration: Evolving Tools and Practical Insights for Addressing Corruption

Recent discussions on corruption risks in international arbitration have highlighted the critical importance of interpreting red flags in this context. In this panel session, FRA Partner Yousr Khalil shared insights on how forensic experts provide meaningful contributions in assessing corruption indicators in arbitral proceedings. Drawing on two decades of experience, she emphasized the limitations of one-size-fits-all frameworks, the evolving sophistication of corruption schemes, and the value of involving experts during the early stages of proceedings. At the heart of her message was a call for nuance, pragmatism, and timing - cornerstones in identifying and analyzing potential misconduct in complex disputes.

The webinar, featuring speakers Stéphane de Navacelle from Navacelle, Karl Hennessee from Airbus, and Vladimir Khvalei from Mansors, explored how arbitration tribunals and practitioners can better navigate indicators of corruption. The discussion revolved around practical guidance, recent case studies, and forward-looking tools for improving the integrity and efficiency of proceedings. The recording of the session is available to watch here.

Contextualizing Red Flags: Beyond Checklists to Substantive Analysis

Red flags, from a forensic perspective, are rarely binary. While standardized guidelines, such as the International Chamber of Commerce’s guidelines, serve as useful starting points, they often oversimplify what is inherently a context-driven review. Risk factors, such operations in a high-risk jurisdiction or an absent compliance program, do not necessarily imply corruption. High-profile cases, like Airbus, have shown that even certified compliance structures may coexist with problematic practices. Forensic experts are tasked with tracing payments and actual benefits - asking not only if there were red flags, but where the advantage lies. Their role is not to draw legal conclusions, but to bring transparency to the underlying data, helping tribunals assess whether indicators of bribery or misconduct are present. This process is deeply reliant on the availability and quality of information and seeks to assist arbitrators - not substitute their judgment.

Evolving Frameworks: Adapting to Modern Corruption Schemes and Procedural Limits

Crucially, frameworks for identifying corruption must evolve alongside the changing nature of the relevant industries, the technology available and methods of carrying out business. Corruption practices that once relied on physical documents, cash transactions, and explicit misconduct have given way to more sophisticated, digitally embedded schemes, requiring extensive document review and data analytics. In arbitration, this complexity is compounded by procedural pressures that often limit document production. One of the core challenges remains defining how far a tribunal can - and should - go in investigating these issues, particularly when stepping into territory traditionally reserved for enforcement authorities.

The Case for Early Engagement: Enhancing Impact through Timely Forensic Input

In this context, the timing of expert involvement becomes essential. Corruption allegations introduced late in proceedings may not only bring its credibility into question, but also constrain the contribution of forensic experts. When engaged early, these professionals can offer realistic assessments based on available evidence, make additional disclosure requests and align investigative focus with procedural constraints. Their objective is not to advocate, but to clarify - to ensure that facts, however complex, are communicated effectively to the decision-makers. In disputes where the presence or absence of corruption can materially affect outcomes, this clarity can prove decisive.

The Growing Influence of Criminal Law in International Arbitration

At a separate session hosted by ESSEC Business School, FRA Director Amina Khoungui contributed to a roundtable alongside fellow panelists Juliette Asso from Lalive, Grégoire Bertrou from Willkie Farr & Gallagher LLP, Ophélie Divoy from DLA Piper, Daniel Schimmel from Foley Hoag, and Bruno Quentin from Gide Loyrette Nouel. The session was moderated by Geneviève Helleringer and chaired by Veronika Korom, both from ESSEC Business School. Amina explored how the rise of global enforcement - led by instruments including the FCPA, UK Bribery Act, and Loi Sapin II - has shaped corporate compliance strategies and, by extension, the way corruption is litigated in arbitration. She outlined common red flags and typologies of financial misconduct, emphasizing the role forensic analysis plays in uncovering and interpreting these indicators.

The panel also addressed the challenges tribunals face when navigating criminal allegations, as well as the rising use - and misuse - of criminal proceedings to disrupt or influence arbitral outcomes. Amina’s remarks highlighted how a forensic perspective can support tribunals in addressing corruption risks with greater clarity and diligence, particularly in high-stakes, cross-border disputes.

Many thanks to FRA Senior Associate, Thibault Portet, for his contributions to this article.